The wealthy have always used many methods to accumulate wealth, but it was not until the mid-1970s that these methods coalesced into a superbly organized, cohesive and efficient machine. After 1975, it became greater than the sum of its parts, a smooth flowing organization of advocacy groups, lobbyists, think tanks, conservative foundations, and PR firms that hurtled the richest 1 percent into the stratosphere.
The origins of this machine, interestingly enough, can be traced back to the CIA. This is not to say the machine is a formal CIA operation, complete with code name and signed documents. (Although such evidence may yet surface - and previously unthinkable domestic operations such as MK-ULTRA, CHAOS and MOCKINGBIRD show this to be a distinct possibility.) But what we do know already indicts the CIA strongly enough. Its principle creators were Irving Kristol, Paul Weyrich, William Simon, Richard Mellon Scaife, Frank Shakespeare, William F. Buckley, Jr., the Rockefeller family, and more. Almost all the machine's creators had CIA backgrounds.
During the 1970s, these men would take the propaganda and operational techniques they had learned in the Cold War and apply them to the Class War. Therefore it is no surprise that the American version of the machine bears an uncanny resemblance to the foreign versions designed to fight communism. The CIA's expert and comprehensive organization of the business class would succeed beyond their wildest dreams. In 1975, the richest 1 percent owned 22 percent of Americas wealth. By 1992, they would nearly double that, to 42 percent - the highest level of inequality in the 20th century.
How did this alliance start? The CIA has always recruited the nations elite: millionaire businessmen, Wall Street brokers, members of the national news media, and Ivy League scholars. During World War II, General "Wild Bill" Donovan became chief of the Office of Strategic Services (OSS), the forerunner of the CIA. Donovan recruited so exclusively from the nations rich and powerful that members eventually came to joke that "OSS" stood for "Oh, so social!"
Another early elite was Allen Dulles, who served as Director of the CIA from 1953 to 1961. Dulles was a senior partner at the Wall Street firm of Sullivan and Cromwell, which represented the Rockefeller empire and other mammoth trusts, corporations and cartels. He was also a board member of the J. Henry Schroeder Bank, with offices in Wall Street, London, Zurich and Hamburg. His financial interests across the world would become a conflict of interest when he became head of the CIA. Like Donavan, he would recruit exclusively from societys elite...
Although many people think that the CIAs primary mission during the Cold War was to "deter communism," Noam Chomksy correctly points out that its real mission was "deterring democracy." From corrupting elections to overthrowing democratic governments, from assassinating elected leaders to installing murderous dictators, the CIA has virtually always replaced democracy with dictatorship. It didnt help that the CIA was run by businessmen, whose hostility towards democracy is legendary. The reason they overthrew so many democracies is because the people usually voted for policies that multi-national corporations didn't like: land reform, strong labor unions, nationalization of their industries, and greater regulation protecting workers, consumers and the environment.
So the CIAs greatest "successes" were usually more pro-corporate than anti-Communist Citing a communist threat, the CIA helped overthrow the democratically elected Mohammed Mussadegh government in Iran in 1953. But there was no communist threat the Soviets stood back and watched the coup from afar. What really happened was that Mussadegh threatened to nationalize British and American oil companies in Iran. Consequently, the CIA and MI6 toppled Mussadegh and replaced him with a puppet government, headed by the Shah of Iran and his murderous secret police, SAVAK. The reason why the Ayatollah Khomeini and his revolutionaries took 52 Americans hostage in Tehran in 1979 was because the CIA had helped SAVAK torture and murder their people.
Another "success" was the CIAs overthrow of the democratically elected government of Jacabo Arbenz in Guatemala in 1954. Again, there was no communist threat. The real threat was to Guatemalas United Fruit Company, a Rockefeller-owned firm whose stockholders included CIA Director Allen Dulles. Arbenz threatened to nationalize the company, albeit with generous compensation. In response, the CIA initiated a coup that overthrew Arbenz and installed the murderous dictator Castillo Armas. For four decades, CIA-backed dictators would torture and murder hundreds of thousands of leftists, union members and others who would fight for a more equitable distribution of the countrys resources.
Another "success" story was Chile. In 1973, the countrys democratically elected leader, Salvadore Allende, nationalized foreign-owned interests, like Chiles lucrative copper mines and telephone system. International Telephone & Telegraph (ITT) offered the CIA $1 million to overthrow Allende which the CIA allegedly refused but paid $350,000 to his political opponents. The CIA responded with a coup that murdered Allende and replaced him with a brutal tyrant, General Augusto Pinochet. Pinochet tortured and murdered thousands of leftists, union members and political opponents as economists trained at the University of Chicago under Milton Friedman installed a "free market" economy. Since then, income inequality has soared higher in Chile than anywhere else in Latin America...
Journalism is a perfect cover for CIA agents. People talk freely to journalists, and few think suspiciously of a journalist aggressively searching for information. Journalists also have power, influence and clout. Not surprisingly, the CIA began a mission in the late 1940s to recruit American journalists on a wide scale, a mission it dubbed Operation MOCKINGBIRD. The agency wanted these journalists not only to relay any sensitive information they discovered, but also to write anti-Communist, pro-capitalist propaganda when needed.
The instigators of MOCKINGBIRD were Frank Wisner, Allan Dulles, Richard Helms and Philip Graham. Graham was the husband of Katherine Graham, todays publisher of the Washington Post. In fact, it was the Posts ties to the CIA that allowed it to grow so quickly after the war, both in readership and influence.
MOCKINGBIRD was extraordinarily successful. In no time, the agency had recruited at least 25 media organizations to disseminate CIA propaganda. At least 400 journalists would eventually join the CIA payroll, according to the CIAs testimony before a stunned Church Committee in 1975. (The committee felt the true number was considerably higher.) The names of those recruited reads like a Who's Who of journalism...
The CIA also secretly bought or created its own media companies. It owned 40 percent of the Rome Daily American at a time when communists were threatening to win the Italian elections. Worse, the CIA has bought many domestic media companies. A prime example is Capital Cities, created in 1954 by CIA businessman William Casey (who would later become Reagans CIA director). Another founder was Lowell Thomas, a close friend and business contact with CIA Director Allen Dulles. Another founder was CIA businessman Thomas Dewey. By 1985, Capital Cities had grown so powerful that it was able to buy an entire TV network: ABC.
For those who believe in "separation of press and state," the very idea that the CIA has secret propaganda outlets throughout the media is appalling. The reason why America was so oblivious to CIA crimes in the 40s and 50s was because the media willingly complied with the agency. Even today, when the immorality of the CIA should be an open-and-shut case, "debate" about the issue rages in the media...
The CIAs fingerprints were all over Watergate. First, we should note the CIA had clear motives for helping oust Nixon. He was the ultimate "outsider," a poor California Quaker who grew up feeling bitter resentment towards the elite "Eastern establishment." Nixon, for all his arch-conservatism, was surprisingly liberal on economic issues, infuriating businessmen with statements like "We are all Keynesians now." He created a whole host of new agencies to regulate business, like the FDA, EPA and OSHA. He signed the Clean Air and Clean Water Acts, which forced businesses to clean up their toxic emissions. He imposed price controls to fight inflation, and took the nation fully off the gold standard. Nixon also strengthened affirmative action. Even his staffers were famously anti-elitist, like Kevin Philips, who would eventually write the bible on inequality during the 1980s, The Politics of Rich and Poor. Add to this Nixons withdrawal from Vietnam and Détente with China and the Soviet Union. Nixon and his Secretary of State, Henry Kissinger, had not only tried to remove control of foreign policy from the CIA, but had also taken measures to bring the CIA itself under control. Not surprisingly, Nixon and his CIA Director, Richard Helms, could not stand each other. (Nixon fired him for failing to cover up for Watergate.) Clearly, Nixon was fighting at cross-purposes with the CIA and the nations elite.
As it turns out, the CIA had inside knowledge of Nixons dirty work. Nixon had created his own covert action team, "The Committee to Reelect the President," more amusingly known by its acronym, CREEP. The team consisted of two CIA agents - E. Howard Hunt and James McCord - as well as former FBI agent G. Gordon Liddy. They also employed four Cubans with long CIA histories. In fact, a CIA front called the Mullen Company funded their activities, which ranged from disrupting Democratic campaigns to laundering Nixons illegal campaign contributions.
The CIA not only had intimate knowledge of Nixons crimes, but it also acted as though it wanted the world to know them. When the FBI began investigating Watergate, Nixon tried using the CIA to cover up for him. At first the CIA half-heartedly complied, telling the FBI that the investigation would endanger CIA operations in Mexico. But a few weeks later it gave the FBI a green light again to proceed again with their investigation.
Furthermore, Watergate was exposed by the CIAs main newspaper in America, The Washington Post. One of the two journalists who investigated the scandal, Robert Woodward, had only recently become a journalist. Previously Woodward had worked as a Naval intelligence liaison to the White House, privy to some of the nations highest secrets. He would later write a sympathetic portrait of CIA Director Bill Casey in a book entitled Veil: The Secret Wars of the CIA. It was Woodward who personally knew and interviewed "Deep Throat," the unnamed source who revealed inside information on Nixons activities. Many Watergate researchers consider one of Woodwards old intelligence contacts to be a prime candidate for Deep Throat...
In the mid-1970s, at this historic low point in American conservatism, the CIA began a major campaign to turn corporate fortunes around. They did this in several ways. First, they helped create numerous foundations to finance their domestic operations. Even before 1973, the CIA had co-opted the most famous ones, like the Ford, Rockefeller and Carnegie Foundations. But after 1973, they created more. One of their most notorious recruits was billionaire Richard Mellon Scaife. During World War II, Scaife's father served in the OSS, the forerunner of the CIA. By his mid-twenties, both of Scaife's parents had died, and he inherited a fortune under four foundations: the Carthage Foundation, the Sarah Scaife Foundation, the Scaife Family Foundations and the Allegheny Foundation. In the early 1970s, Scaife was encouraged by CIA agent Frank Barnett to begin investing his fortune to fight the "Soviet menace." From 1973 to 1975, Scaife ran Forum World Features, a foreign news service used as a front to disseminate CIA propaganda around the world. Shortly afterwards he began donating millions to fund the New Right.